Results

Dollar General

Dollar General is a leading discount retailer with more than 9,800 neighborhood stores. Dollar General enrolled in KKR’s Green Portfolio Program in 2009 and is focusing on its efforts to: improve energy efficiency in its stores, store support center, and distribution centers; improve the efficiency of its distribution fleet; and reduce waste in its stores.

Key Environmental Performance Areas:

• Greenhouse Gas Emissions (Facilities)
• Greenhouse Gas Emissions (Fleet)
• Waste Reduction

Greenhouse Gas Emissions (Facilities)

In 2009, Dollar General began actively measuring energy consumption in its stores, Store Support Center, and distribution centers through the Green Portfolio Program. In absolute terms, GHG emissions from these sources have increased 23%, compared to a 2007 baseline, primarily due to an expansion in store operations and a substantial increase in refrigerated and frozen product. Over the same time period, efficiency has improved by 16% (GHGs/carton shipped) at distribution centers, 9% (GHGs/$1000 revenue) at stores, and 16% (GHGs/headcount) at its store support center.¹ These improvements in efficiency have helped Dollar General to avoid approximately $39 million in energy costs and more than 268,000 metric tons of GHG emissions since 2007.

Results

Dollar General: GHG Facility Efficiency (2007 Baseline)

Actions

In 2010, Dollar General achieved its results through the following practices:

• Consolidated distribution center operating shifts and rationalized powered equipment usage
• Installed Energy Management Systems in stores

• Installed more energy efficient lighting in both retail stores and its store support center

Future Plans

In 2011 and 2012, Dollar General is continuing to focus on improving the energy efficiency of its facilities and is considering or actively implementing the following practices:

• Installing additional Energy Management Systems in new and existing stores
• Continuing to explore opportunities to replace lighting with more energy efficient fixtures
• Procuring HVAC and other equipment with improved energy usage ratings

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Greenhouse Gas Emissions (Fleet)

In 2009, Dollar General began actively measuring the efficiency of its distribution fleet through the Green Portfolio Program. In absolute terms, GHG emissions from the distribution fleet increased 8% compared to a 2007 baseline. Though it does not own its distribution fleet, Dollar General implemented a number of improvements that directly resulted in improved fleet efficiency. Therefore, over the same time period, efficiency improved by 18% (GHGs/1000 carton shipped). These improvements in efficiency have helped Dollar General to avoid approximately $116 million and almost 118,000 metric tons of GHG emissions since 2007.

Results

Dollar General: GHG Fleet Efficiency Results (2007 Baseline)

Actions

In 2010, Dollar General achieved its results through the following practices:

• Reduced stem miles (miles without loads) between the distribution center and stores  through improved routing, distribution center to store assignments, and vendor ship point optimization
• Implemented operational and systemic improvements to increase cartons per load for inbound and outbound shipments

Future Plans

In 2011 and 2012, Dollar General is continuing to focus on improving the efficiency of its fleet and is considering or actively implementing the following practices:

• Adding a distribution center in Bessemer, AL to reduce stem miles
• Optimizing distribution center to retail store assignments

• Increasing cartons per load (inbound and outbound)

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Waste Reduction

Since 2007, Dollar General focused on reducing and recycling cardboard waste from its stores and distribution centers. To measure the financial and environmental impacts of its improvements, it measured waste production and recycling rates against a 2007 baseline. Despite significant growth in store operations, since 2007, Dollar General has reduced its waste production in absolute terms by approximately 74% and has improved its waste efficiency by more than 80% (cubic yards of waste/dollar of revenue). These improvements have helped Dollar General to achieve combined cost avoidance and recycling revenue of an estimated $80 million, to avoid approximately 19 million cubic yards of waste and to recycle more than 345,000 tons of cardboard since 2007.

Results

Dollar General: Waste Reduction (Facilities) (2007 Baseline)

Actions

In 2010, Dollar General achieved these results through the following practices:

• Cardboard recycling programs across its stores and distribution centers
• Recycling of paper, including greeting cards and magazines

• Sold collected cardboard, greeting cards, and magazines for post-consumer use

Future Plans

In 2011 and 2012, Dollar General is continuing to focus on reducing waste and is implementing new programs, including:

• Investigating feasibility of recycling plastics and other consumables in its store and distribution centers

Dollar General enrolled in the Green Portfolio Program in 2009 and is reporting results for the second time.

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¹In 2010, KKR and Environmental Defense Fund changed the efficiency metric for tracking performance at Dollar General retail stores from “greenhouse gas emissions / operating hour” to “greenhouse gas emissions / $1000 revenue” to better measure store productivity and to provide insight into store performance against a commonly used metric for retail space. This metric also better accounts for a growth in sales related to a recent shift in Dollar General’s strategy to expand freezer and refrigeration capacity in its stores, which consumes more energy. Dollar General’s revenue / operating hour increased significantly between 2009 and 2010.